The governor, who Harris said leans toward using the surplus to avoid the pension holiday
, had hoped the move to a graduated income tax and other revenues would be such a boon that they would allow the state to quickly (well, over the course of a seven-year extension of the pension payback ramp) make up for the holiday.
The funding situation at the largest pension plan, VRS Teachers plan, declined over the last decade due to the Great Recession and Commonwealth's subsequent pension holiday
. As of fiscal 2018 the Commonwealth once again required employers to make full actuarial required contributions.
These governments rarely, if ever, take a pension holiday
, making their full contribution whether the stock market is up or down.
Then, when money got tight, it declared a "pension holiday
,'' reducing the state's contribution to the pension fund by 56 percent in 2006 and 45 percent in 2007, which deepened the pension crisis.
Many Labour MPs are worried the sell-off of part of Royal Mail will mean we nationalise the pension risk - partly caused by the 13-year pension holiday
- and privatise the profitable parts.
"The company took a pension holiday
for six years and a partial holiday for the last three.
Secondly, companies in the 1990s declared a pension holiday
and paid out 90 per cent of the money they saved in the form of profits and dividends.
"The thought of another pension holiday
as a shortcut to meaningful budget negotiations was simply wrong," Deputy House Minority Leader Dan Brady (R-Bloomington) said.
Fiscal 2017 was the last year that the VRS Teachers plan did not make full actuarial contributions after an extended pension holiday
, and going forward full actuarial contributions are scheduled.
As far as the pension fund goes, this is in trouble not because of the recent economic downturn but because RM bosses were allowed to take a long pension holiday
while posties still had to pay in.
As owners, they took a prolonged pension holiday
which is partly responsible for today's massive deficit."
While taking a pension holiday
might seem an easy way to save cash in the short term, it could have a severe long term impact on an individual's quality of life in retirement.